Keidanren is calling on member companies to consider annual income growth for workers as the 2016 wage talks between management and employees get under way.
Company managers do not need to stick to pay-scale hikes, according to Keidanren's guidance for corporate executives, released Tuesday.
The report from the nation's biggest business lobby points out other options, such as one-time increases to boost workers' annual salaries.
The strategy was released amid repeated calls from Prime Minister Shinzo Abe for companies to raise wages for the third straight year, as his administration seeks to put the economy on a sustainable recovery path.
Bank of Japan Gov. Haruhiko Kuroda, who has set a goal of 2 percent inflation, has also stressed the need for wage increases.
The Japanese Trade Union Confederation (Rengo), the nation's largest labor union body, has already decided to call for a base pay rise of around 2 percent.
Major companies, especially those that rely heavily on exports, have reaped record profits and appear more willing than small and medium-size firms to go ahead with pay hikes.
This year's wage talks come as financial markets have been rattled by concerns about an economic slowdown in China.
The labor union of Toyota Motor Corp., whose wage talks tend to be a bellwether for other companies, plans to seek a monthly base wage hike of at least ¥3,000.